CREDIT SUISSE SET TO MERGE TRADING, INVESTMENT BANK IN OVERHAUL
saw this on zero hedge, am going to be an SA next summer anybody know what's going on?
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https://www.bloomberg.com/news/articles/2020-07-28/credit-suisse-set-to…
This shouldnt impact SAs, but there will be a lot of senior executives made redundant by bringing it under one roof with one reporting hierarchy
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Gottstein seems to have a soft spot for IB given that he was a banker. Not sure what this overhaul means, but it looks like he's returning to a similar structure that was in place under Brady Dougan, before Thiam took the helm and started cutting IB. I read that Gottstein plans to bolster CS's strongest groups (one could guess Sponsors/LevFin/M&A/Industrials?). He has also made remarks about cutting headcount in wealth management and physical branches (none of which are located in the U.S.) as the pandemic has demonstrated that much of the work can be done online with a lower headcount. Let's see what earnings reveal on Thursday.
Don't forget that David Miller and a lot of the guys who run FSG/LevFin/Credit are part of the old DLJ crew. The DLJ franchise put CS on the map in the early 00s, and there are still some hosses running the show. Pretty hard to scale back IB operations when you have some of the best senior bankers on the street.
Would you also consider TMT a strong group at the bank?
absolutely. fsg, tmt, and m&a are the 3 most sought after troupe each year
Monster quarter for CS – IBCM fees up 61% YoY, debt underwriting fees up 83%, profit margin of nearly 30% in the IBCM unit. Highest net income in a decade. Some key quotes from Gottstein:
"The restructuring is less driven, frankly, by cost consideration, that’s a positive side effect, but it’s more driven by the increased revenue growth opportunities that we see [in the investment banking unit]"
"David Miller was very convinced that we should do the [merger into one investment banking unit]" ... "David has been a main driver of this combination" ... "he will continue to lead Advisory and Capital Markets within the Investment Bank division"
"A lot of the revenues that we’re actually making in Private Banking and profitability, we are making because we have a strong investment bank"
Overall, seems like a positive outlook for banking at CS as a whole. Still ranked first on Bloomberg's LBO Loans league table by a longshot. Also worth noting that CS's M&A revenues increased 13% while Barclays, Deutsche, and UBS fell 32%, 39%, and 23% respectively.
CS just released very strong earnings, that should alleviate any concerns here
Current SA. This doesn't affect anyone at the junior level (at all) and senior bankers (across IBCM and S&T) are excited about it as it supposedly will reduce bureaucratic headaches.
Gottstein said all cost synergies from the re-org will be reinvested back into the new division
any insight on the power, utilities, and renewables group at CS?
Any insight on their energy banking groups merging? They announced that their Oil & Gas and Infrastructure, Power, Renewables groups would be combined - not sure how this impacts some of the regional offices like Houston, Calgary etc.?
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